This article is from the Australian Property Journal archive
Centennial and Parkstone Funds Management have partnered again to purchase a shopping centre on the largest landholding in the NSW town of Orange, in a $37.375 million deal.
Over 99% leased, The Village on Summer Street is anchored by Supa IGA, one of Australia’s top performing Dan Murphy’s outlets, and 10 specialty retailers, across 4,974 sqm of gross lettable area and is supported by 268 car parks.
The Village occupies a 21,090 sqm with 2,573 sqm of developable land, and the partnership is proposing to develop a further 1,800 sqm of retail space in the short-term on the back of current demand from national retailers.
The 100% freehold stake was acquired from hospitality identity Bill Gravanis and renowned architect Paul Saunders, and was partly funded by a $20 million capital raising, which closed early and oversubscribed in December.
Steven Lerche of Savills and Nick Willis, Sam Hatcher and Sebastian Fahey of JLL brokered the sale.
The closed-end Village on Summer fund is targeting an internal rate of return of 15% to 17% per annum “comprising a healthy income component based on the centre’s dominant position in the region, its defensive characteristics derived from a retail mix geared towards non-discretionary retail spend, and its strong value add potential and convenient access to car parking”, the partners said.
The centre was built in 1993 and underwent a $4 million refurbishment in late 2022, which earned a building award from the Master Builders’ Association of NSW in the latter half of last year.
Executive director of Centennial, Paul Ford said The Village offered “strong defensive income based on its largely non-discretionary retail mix, positive growth indicators for the region and limited new supply of retail assets in the CBD”.
“We are well on our way to scaling our retail exposure towards in excess of $1 billion and during an attractive point in the retail sector cycle.”
Centennial also invests in mid-size last-mile industrial and logistics assets.
Parkstone’s executive director and co-founder, Christopher Day said the group was pleased to be gaining a greater foothold into the Orange region, with its population growing in step with an economy largely driven by diverse industry sectors including tourism, agriculture, health, education, retail, mining and government.
“It supports a catchment area of over 100,000 people from nearby towns and districts and is not dissimilar in demographics to our first retail joint venture with Centennial formed in early 2024, when we acquired Bundaberg’s 21,000 sqm Hinkler Central in central Queensland.”
“Like Bundaberg, Orange is experiencing strong and sustained population growth driven by diverse employment opportunities, government infrastructure spending and access to quality services including health and education facilities.
“These economic drivers are underpinned by more affordable housing options compared to the state capitals that are leading to sustained growth in the regions, underscored by surging migration numbers.”
Parkstone’s retail portfolio now comprises around $300 million in assets under management across seven sub-regional and neighbourhood centres in NSW, South Australia and Queensland.
Centennial secured an equity stake in Parkstone as part of their joint acquisition of Hinkler Central.
